Construction Spending Seeing Slower Growth

According to the Census Bureau, the value of construction put in place in July 2014 was $88,639 (millions of real dollars). Compared to one year ago, spending in July was up 4.3%. The last two months have had the slowest month-over-month rate of growth since July 2013. As a result of the slower month-over-month growth, the annual rate of growth appears to have peaked. 

Residential construction spending has seen an even greater slowing in the rate of growth. July residential spending was 4.9% more than last year. But, like total construction spending, the last two month's of residential spending had the slowest month-over-month growth since April 2012. The annual rate of growth has to slowed to 10.7% from 20.2% in August 2013. The decelerating growth likely will continue for the next quarter or two.

Real construction spending is a good leading indicator for construction materials, hardware, and HVAC industrial production.